7/31/2010

George Santayana once warned us about not learning the lessons of history: “Those who ignore history are doomed to repeat it.” Over 6 of the past 7 decades I've seen this axiom proven again and again, yet somehow we still ignore history and go on to repeat the mistakes of the past.

One of the biggest mistakes we, meaning the US, have made over and over again during the past 234 years of our nation has been cutting defense spending too deeply and too quickly after a conflict has ended. Every time we have done that we have been caught with an unprepared and undermanned military that ended up causing much greater loss of American lives than if we had been prepared. That presumes, of course, that such an event would even have occurred if we'd still had a credible military. History abounds with examples where we made the wrong decision and ended up paying the price for it, sometimes for decades.

The prospect of an exit from Iraq and Afghanistan has sparked rumblings on Capitol Hill that it's time to cut the defense budget.

If there were ever evidence that it's impossible to learn from history -- or at least that it's difficult for politicians to do so -- this is it. Before they rush to cut defense spending, lawmakers should consider the consequences of previous attempts to cash in on a "peace dividend."

After the American Revolution, our armed forces shrank from 35,00 men in 1778 (plus tens of thousands of militiamen) to just 10,000 by 1800. The result was that we were ill-prepared to fight the Whiskey Rebellion, the quasi-war with France, the Barbary wars and the War of 1812 -- all of which might have been averted if the new republic had had an army and a navy that commanded the respect of prospective enemies, foreign and domestic.

After the Civil War, our armed forces shrank from more than a million men in 1865 to just 50,000 in 1870. This made the failure of Reconstruction inevitable -- there were simply too few federal troops left to enforce the rule of law in the South and to overcome the ruthless terrorist campaign waged by the Ku Klux Klan and other white supremacist groups. Segregation would remain a blot on U.S. history for another century.

The same thing happened after World War I, World War II, Korea, Vietnam, the Cold War, and the Gulf War. And each time it ended up crippling our military and causing far more problems and costing more than if we'd maintained some semblance of a strong military.

As the old saying goes, “If you want to preserve peace, prepare for war.”

With a weak military, or one perceived as weak, enemies are more likely to push the limits, up to and including an attack on American forces or civilian targets. That has been the pattern throughout history, where an aggressor takes advantage of nation's weakness. Just because it's the 21st Century doesn't mean there aren't nations or ideological groups out there waiting for us to cripple ourselves, allowing them to move with impunity. But if they know without a shadow of doubt that we would retaliate with the full force of our superior military forces, such an attack would be far less likely.

It's too bad our present occupant of the White House and the members of Congress are choosing to ignore the lessons of history and will be trying to send us down the same path to the same ends as many of their predecessors have.

7/29/2010

One of the many claims made in favor of ObamaCare is that it would mean a decrease in the workload at hospital emergency rooms as people seeking treatment would go to a regular doctor once they had health insurance. But if the situation in Massachusetts is any indication, that claim cannot be justified.

Just as Massachusetts' health care system has been the prototype for ObamaCare, it has also shown that many of the features included in ObamaCare won't work. The ER claim is but one of them.

A year ago at a town hall meeting on health care reform, he said, "We know that when somebody doesn't have health insurance, they're forced to get treatment at the ER, and all of us end up paying for it. ... You'd be better off subsidizing to make sure they were getting regular checkups." In late May, House Speaker Nancy Pelosi wrote in Roll Call that "the uninsured will get coverage, no longer left to the emergency room for medical care."

Now we know better.

It's not terribly surprising that real data from Massachusetts, which has had universal health coverage since 2006, show otherwise. From 2004 to 2008, ER visits in the Bay State rose by 9%, with no discernable improvement after 2006. Why? At least part of the reason has been the inability of patients to find primary care physicians for last-minute visits. Let's face it: The ER won't turn you away, but individual and overburdened doctors can and will. The Massachusetts Medical Society has reported that new patients wait for a primary care doctor visit up to two months.

Under ObamaCare we can expect exactly the same results nationwide because exactly the same problems exist in the rest of the nation as well. ObamaCare doesn't increase the number of hospitals, physicians, nurses, and other medical care staff. All it does is place an even greater burden upon them than doing nothing. That is no way to 'reform' health care.

7/28/2010

One of the more lucid commentaries I've ever read dealing with the financial mess the Democrats have been foisting upon us came not from this Wall Street Journal op-ed piece, but from a WSJ reader who manages to put it into perspective for those of us not infected with the progressive mind rot about economics (how it should work rather than how it does work).

The Progressive mindset is a curious one. It only makes sense or becomes predictable once you realize that to them, Utopia is reached through faith in the inherent goodness of their goals. As such, it is really a religion. I say this not to disparage the concept of religion in general, but to recognize that religion is marked by a belief that "faith is the substance of things hoped for, the evidence of things not seen." Thus, to a true believer, no amount of logic or objective evidence will sway their opinion, since in their eyes, the true test of faith is to adhere to your beliefs when all else tells that your course of action has no chance to bring about the result you wish it to.

Thus, Progressives cling to their backwards, illogical view of the workings of the economy not because they have ever been proved correct, but because they have faith that this is the way the world works, and because this is the only pseudoscientific framework that has ever been constructed that gives their desire to control other people for their own good some sort of supposed systematic logical basis. Thus, telling them that their logic makes no sense actually only serves to solidify their resolve, because Keynesian thought is actually based on the economy being controlled by "animal spirits" that are illogical. Thus, economic crashes are not brought about by predictable, understandable chains of logical cause and effect, but instead are brought about by the capricious whimsy of illogical humans, who stampede over the cliff of liquidity traps with wild abandon like lemmings.

They don't expect the economy to make sense. Rather, they expect to follow the wisdom of their high priests no matter what the economic dials and guages (sic) are showing, because the two things they have faith in are that good intentions will always triumph, and that the economy is a backwards, illogical machine that can only be steered by turning left if you want to go right.

Ah, yes, good intentions. We all know where that road leads, don't we?

How many times have we seen a government decide it knew best how to handle its national economy, only to see all its efforts make things progressively worse to the point where the economy collapses, and with it, the government that tried to 'save' it? The harshest example has to be the the old Soviet Union, where all their 5-year economic plans failed to produce anything in abundance except inefficiency, shortages of vital goods, and misery. Venezuela has been heading down that road to hell and Argentina is following close behind.

Britain narrowly escaped the same fate when Maggie Thatcher became prime minister and proceeded to undo all the damage done to the British economy by her wrong-headed, though good intentioned predecessors. She understood, as did Ronald Reagan, that no one person or group of people are smart enough to control an economy to the betterment of all.

One of the most easily documented examples has been economic central planning, which was tried in countries around the world at various times during the 20th century, among people of differing races and cultures, and under government ranging from democracies to dictatorships.

The people who ran central planning agencies usually had more advanced education than the population at large, and probably higher IQs as well.

The central planners also had far more statistics and other facts at their disposal than the average person had. Moreover, there were usually specialized experts such as economists and statisticians on the staffs of the central planners, and outside consultants were available when needed. Finally, the central planners had the power of government behind them, to enforce the plans they created.

What is remarkable is that, after a few decades of experience with central planning in some countries, or a few generations in others, even communists and socialists began to repudiate this approach.

All such control diminishes economies and acts as a disincentive for anyone trying to do anything to improve it. China and India came to understand the concept and abandoned tight government control over their economies and they boomed to a level never seen before in either country's history. It's too bad the Progressives in this country have failed to learn that lesson and are willing to make the same mistake. Of course I expect their refrain will be “But we'll get it right this time!”

The only explanation I can come up with for the Progressives' belief they can succeed where everyone else has failed is insanity. You know, the type of insanity defined so: “Doing the same thing over and over again but expecting different results this time.”

7/25/2010

It's been a glorious weekend here in the Lakes Region of New Hampshire. While the rest of the East Coast has been roasting we've been seeing temps in the mid to upper 80's, though the humidity has been quite high. We didn't fire up the air conditioning in The Manse until late afternoon when the sun comes pouring through the deck sliders, heating up the interior rather quickly.

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We headed out on to the lake with some of Deb's friends this afternoon, waiting until most of the weekenders had gone, leaving the lake less turbulent than it otherwise would be. We did have to deal with a heavy shower about half an hour before we'd planned to leave, but once it passed we headed out. An hour or so later the sun reappeared and what had been a pretty good time out on the lake turned into a great time on the lake.

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BeezleBub is learning the ins and outs of car ownership, specifically the costs of running and maintaining a 35-year old Jeep CJ5.

If nothing else he's learning that gas isn't cheap and that his Jeep isn't fuel efficient in the least. (He's averaging 15 miles to the gallon.) The Jeep also has a small gas tank (probably 12 to 16 gallons, though we aren't sure). As long as the only traveling he's doing is between home and work or school, with a few side trips with Hobbit and/or Irina, a full tank should last him 2 weeks, maybe more. (I expect he'll be putting less than 5 or 6 thousand miles per year on the Jeep.)

He knows it's up to him to pay for everything his Jeep requires - gas, oil, tires, repairs, registration, and inspection. Deb and I pay for the insurance, period. All the rest is up to him.

I think he's going to find it's great to have your own vehicle, but that there's a price to pay for that kind of freedom.

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It was telling listening to Tim Geitner's opinion about the expiration of the Bush tax cuts at the end of this year. It has become apparent to me that he's one of those who believes there is a linear relationship between tax rates and revenues collected. He expecting that once the tax cuts expire the Treasury will see billions more in revenue flooding the coffers. Is he in for a big disappointment.

The battle over the Bush tax cut expiration is just beginning, with even Congressional Democrats voicing their concerns that raising taxes now would further weaken an already shaky economy.

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I have to admit that when I first heard of Linda McMahon's candidacy for Connecticut's Senate seat being vacated by Chris Dodd, I thought it was something of a joke. After all, she's part of the WWE (World Wrestling Entertainment) empire. But the more I hear about her and her beliefs, the less of a joke she's become.

Some are describing her as “John Galt in skirts”, something that piqued my interest and made me take a second look at her.

As a self-made millionaire, she certainly understands economics and what it takes to build a business. She also has a pretty good understand of how not to expand the economy, meaning taxing and regulating every aspect of doing business to death.

That puts her far ahead of any of the other candidates in either party running for Dodd's seat.

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As if the above isn't enough to tweak the warmist, there's this: Despite the record warm temps we're seeing in parts of the Northern Hemisphere, it's just the opposite problem in the Southern Hemisphere, particularly South America, with record cold that has already killed hundreds.

As I recall last winter in the Southern Hemisphere was pretty darned cold as well.

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If anyone needs an example why socialism is anathema to human existence, then all one needs to do is watch this. (A warning: It's almost 90 minutes long, but worth watching.)

If you think the evils of socialism cannot occur again, you're wrong. All one needs to do is look at Venezuela. About the only thing that hasn't happened there (yet) is the extermination of a convenient class of scapegoats to strengthen Hugo Chavez's grip on power.

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To a point I can agree with him. We should so away with air-conditioning...in Washington DC. Or more specifically, in the Capitol Building and all of the congressional offices. There should also be no heat for the winter.

What will that accomplish? Just this: Congress will have very little time to figure out new ways to spend money we don't have or to pass laws nobody wants or needs. It will either be too hot or too cold for the Congresscritters and their staffs to waste our money and our time because they'll have at most 6 months out of the year when the chambers of Congress and their offices aren't insufferably hot or cold. They'll go back to their home states and leave us alone to get on with our lives.

Being a member of Congress was never meant to be a full time position nor a lifelong career, but that's what it's become. Part of what made it possible is our modern HVAC systems. It's time to outlaw them in all Congressional venues, period.

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And that's the news from Lake Winnipesaukee, where the hot and humid weather has departed (for now), the boating is delightful, and where thoughts of fresh sweet corn on the cob beckon.

7/24/2010

As I reported in this post, banks are selling more homes than developers. That's not good news. What makes it worse news is that for every home presently for sale, there are two more waiting to go on the market. If all those homes were put on the market now, the already shaky (and declining) housing market would collapse entirely and real estate values would head for the cellar. Those homeowners trying to sell their homes would be crowded out of the market and would be forced to sell them for far less than the homeowner might owe, meaning it would be cheaper for the homeowner to either walk away or declare bankruptcy and let the bank take it. In each scenario both the homeowner and the bank would lose and yet another home would have it's value reduced to almost nothing.

This is not a new situation.

Back in the early 90's a similar housing bubble burst and millions of homes were foreclosed upon. It wasn't uncommon to see 20 pages of foreclosure auctions in the newspaper (or at least in the statewide paper here in New Hampshire). The Resolution Trust Company, an entity created by the federal government to dispose of these bank-owned properties, had over $1.3 billion (~$2.1 billion in 2010 dollars) worth of real estate to sell in New Hampshire alone. As now, they couldn't dump all of those properties on the market at the same time without destroying what little was left of the real estate market at the time. It took the RTC years to dispose of all those properties, putting them up for sale as the demand rose.

Is it possible the same thing will be required again to prevent the worst from happening?

7/23/2010

As if we need even more evidence the housing market is built on sand, the June housing sales showed a decline of 5.1%, indicating a deepening slump.

What's worse is that banks are selling more homes than developers, meaning the banks are shedding themselves of bank-owned properties (meaning foreclosed homes). When banks do that they'll sell them for lower prices in order to be rid of them, driving down real estate prices in general. That will sap even more equity from present homeowners, putting some of them upside down on their mortgages as any equity they had has now disappeared.

Why should anyone in business today want to take the chance of adding employees when they don't know what the Obama Administration and Congress has in store for them? Both seem to be on an anti-business bender, blaming business big and small for the troubles we've all been experiencing. Never mind that it was a Democrat controlled Congress that started spending money like there was no tomorrow. (During the last 2 years of the Bush Administration the budget deficits were bigger than the previous six years combined. It was during the last 2 year of the Bush Administration the big spending Republicans in Congress were replaced by the even bigger spending Democrats.) Never mind it was Democrats in Congress who thwarted President Bush's efforts to rein in Fannie Mae and Freddie Mac.

Why should Obama, Pelosi, or Reid let facts get in the way of their socialist agenda?

7/18/2010

It's been kind of a quiet weekend for us here at The Manse. BeezleBub worked at the farm, Deb at one of the local nursing homes, and me all over The Manse, inside and out.

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One thing that BeezleBub did that was exciting this weekend was attend the Zac Brown Band concert at our local venue, Meadowbrook Farm. While he would have liked to take his sorta-girlfriend, Hobbit, she had other family obligations that prevented her from being able to attend. So BeezleBub asked one of his friends at the farm if they'd like to go.

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Just a reminder: I will be tweaking the blog templates over the next week or so, so if things look a little screwy now and then it's just me making adjustments.

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I was a witness to a traffic accident yesterday.

While waiting at one of the traffic lights near our local Lowe's I saw the driver of an SUV heading down the street decided that he/she absolutely needed to pull into the gas station right then and there. Never mind he/she was in the center lane and had to cross two lanes of traffic to make the turn. Never mind that there was another entrance around the corner. Never mind that someone else was already in the lane he/she tried to cross to get into the gas station.

As anyone slightly acquainted with physics knows, no two objects can occupy the same time/space coordinates. The resulting crunch, while not loud, did end up leading to one blocked lane while police and fire-rescue personnel performed their duties. Fortunately no one was injured beyond some frazzled nerves.

(The gender of the offending party has been generalized just because I felt like it)

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This almost sounds like something out of The Terminator.

First there was plate body armor. Then there was kevlar. Then ceramic body armor (think Dragon Skin). Now there's liquid armor.

The ones with private sectors that are not doing well enough to bail out the government.

Government finances are important, but in the end it is the private sector that matters most.

At the moment I doubt the US government can count on the private sector to pony up the cash needed to help the government to pay its debts, not with ever higher tax and regulatory burdens being placed upon it. It seems every step the Obama Administration has taken to strengthen the economy has had just to opposite effect. (It doesn't help that the private sector has been universally ignored by Obama and his advisors, made up mostly of academics with little or no real world experience.)

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As if we need yet another reminder that cellphone usage in inappropriate situations can be fatal, a 21-year old New Hampshire woman was killed in a traffic accident in Massachusetts because instead of paying attention to her driving she was allegedly texting on her phone.

She lost control of her car, hit a tractor trailer which in turn crushed her car, ejecting her onto the highway where she was then struck by another tractor trailer.

Is a text message so important that it's worth dying for? Apparently some people think so.

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“Oh, yeah. I have a great idea! Let's make it more difficult for teens to find work by raising the minimum wage and making unpaid internships illegal! That ought to spur the economy!”

Yeah. That ought to work. Yeah. Uh-huh.

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First, they decide they knew how to spend our money better than we do. Next, they took away our right to choose our own health insurance and care provider. Then they decided that it would be best for everyone if they make it so difficult for local banks to do business and for small businesses to operate at a profit because they know profit and credit is evil. But now they want to tell us we can and cannot eat and what we can and cannot grow in our own vegetable gardens.

More than a few ObamaCare supporters have tried to discredit the idea that many small to medium sized businesses will drop health insurance for their employees because the fines are much less expensive than the insurance premiums, forcing the employees to go to the government for their insurance.

But that's exactly what's happening in Massachusetts, where the ObamaCare prototype, MassHealth, is seeing businesses doing just that.

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I think Basil may be on to something in regards to how it is some people will keep supporting Obama no matter what he does.

7/17/2010

Despite all it's promises to the contrary, the Obama Administration has failed to stimulate the housing market in any meaningful way. While the attempt made with the home buyer tax credits did boost home sales a bit, home sales tanked after the tax credit ended.

Last month mortgage applications for new homes and refinancing hit a 13-year low despite record low interest rates (see below). It's also expected the number of foreclosures this year will be greater than last year despite the Obama Administration's attempts to “bully and wheedle banks into stopping foreclosures”, an effort that's failed for the most part.

Remember when the Obama administration announced its plan to spend billions of dollars to prevent foreclosures? The White House threatened banks that attempted to seize defaulted property and tried to get judges to reset the principal of the loans in court. None of that has helped stop the wave of foreclosures; it has only delayed and strung out the pain, ironically cresting just as voters go to the midterm polls.

The housing market won't recover until the economy actually starts creating more jobs. Without jobs, nothing Obama does is going to fix the worst housing market we've seen in decades.

None of the stimuli and the rescue plans worked, because none of them addressed the core problem: joblessness. Without jobs, people lose their homes no matter how much the government intervenes to stop it.

Until we get people back to work, these programs are simply futile. A homebuyer tax break doesn’t help someone without a job qualify as a buyer, and restructuring plans for existing mortgages can’t help an unemployed person make a mortgage payment.

Obama has put the cart before the horse, trying to bolster one part of the economy (housing) without making sure another part has the means to sustain it (jobs). Maybe he's expecting the housing market to lead the way to recovery. If so he has made a major faux pas as the housing market tends to be a lagging indicator of economic recovery. It's a leading indicator only if the economy starts heading down into recession.

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I took a look at today's finance rates from our local bank which shows a fixed 30-year mortgage at 4.375% and a 20-year fixed at 4.25%! That's the lowest I've seen, ever.

I ran the numbers for our present 30-year mortgage (at 5.75%) through their calculator and found we'd save $70 per month on our mortgage payment if we took out a 20-year mortgage for refinance. That means we'd take years off our remaining mortgage and still pay less than we're paying now.

Something's happened to America, and it isn't good. It's become easier to get into trouble. We've become a nation of a million rules. Not the kind of bottom-up rules that people generate through voluntary associations. Those are fine. I mean imposed, top-down rules formed in the brains of meddling bureaucrats who think they know better than we how to manage our lives.

Cross them, and we are in trouble.

This problem is getting worse all the time. We hear stories about some poor sap ending up being fired or expelled or arrested for breaking some nonsensical and totally useless rule or law that no one in their right mind would ever think were necessary or desirable.

One of my pet peeves when it comes to this kind of nonsense? Zero tolerance policies.

Stossel also provides a few examples of zero tolerance laws that do nothing more than make the local policymakers look like imbeciles. My favorite is this one:

Ansche Hedgepeth, 12, committed this heinous crime: She left school in Washington, D.C., entered a Metrorail station to head home and ate a French fry. (Emphasis added) An undercover officer arrested her, confiscating her jacket, backpack and shoelaces. She was handcuffed and taken to the Juvenile Processing Center. Only after three hours in custody was the 12-year-old released into her mother's custody. The chief of Metro Transit Police said: "We really do believe in zero-tolerance. Anyone taken into custody has to be handcuffed for officer safety." She was sentenced to community service and now carries an arrest record. Washington's Metro has since rescinded its zero-tolerance policy.

Examples of that kind of stupidity and sloth abound. Yet Congress and the federal government continue to crank out new laws that criminalize the most trivial behavior, or in some cases non-behavior in an effort to control every aspect of our lives. And it's not just the feds, but state and local governments and institutions that have fallen into the same mindset.

How do we solve this increasingly monstrous trend?

I can think of a few remedies, including a constitutional amendment that requires that for every new law passed, an old one must be repealed. And not just any old law, but one of equal import and scope. If not for that condition we'd be seeing all kinds of new laws passed that end up being balanced by repealing trivial laws that have outlawed things like spitting on the sidewalk.

Another tactic is to file a class action suit against every trivial, wasteful, and mind-numbing piece of legislation or regulation that comes out of government at every level. Bury them in endless litigation, making it difficult, if not impossible to enforce.

One of the tactics I like best? Ridicule. Make it known far and wide the abject stupidity of any law, rule, or regulation that defies common sense and has a profound negative effect on the citizens and allows the bureaucrats from actually having to make any decisions about anything. Let the people know of the unintended consequences of imposing such laws, rules, or regulations and let them know who it is that created them. Show them for the lazy dunces they are.

A follow up to this last tactic: Vote them out of office or fire them. People this stupid or lazy shouldn't be holding positions of authority over any of us.

7/14/2010

It was while reading the comments to this Brian Riedl piece about the myth of the Bush tax cuts and the deficit that I a suspicion of mine was confirmed, that being that far too many otherwise educated and experienced people still have little understanding of the relationship between taxes, government spending, and economic growth.

First, the three myths.

The Bush tax cuts wiped out last decade's budget surpluses.

The next decade's deficits are the result of the previous administration's profligacy.

Declining revenues are driving future deficits.

I won't delve into the rebuttal Riedl provides as you are more than capable of reading it for yourself.However I can boil it down to a simple, easily understood phrase: It's the spending, Stupid!”

Tax cuts didn't cause the deficits during the Bush Administration. They didn't cause the unprecedented deficits during the first 19 months of the Obama Administration. The shortfall in revenue was not the problem then, and it's not the problem now. It's the spending by our government that exceeds what it takes in that is causing the deficits, period. Raising taxes won't solve the revenue shortfall because they won't generate the revenues Congress expects. Instead, revenues will fall off as the higher taxes discourage the very economic activity the government needs in order to expand the tax base.

Now comes the fun part.

Reading the 200+ comments to Riedl's op-ed piece, it is quite obvious who gets it and who doesn't.

Probably one of the most disturbing set of comments came from someone who is purportedly an experienced CPA, yet doesn't understand the Laffer Curve for what it is: a graphic representation of the relationship between tax rates and tax revenues. More than one comment showed her lack of understanding that the relationship between tax rates and tax revenues is not linear, meaning that if tax rates are doubled on some economic activity the revenue collected does not automatically double. It will be less than that because the higher taxes discourage the activity being taxed, hence less money changes hands, in turn decreasing the amount of money available to be taxed.

She also likes to make claims she doesn't back up or is unwilling to admit she was wrong when confronted with facts from the very sources she (sometimes) quotes. An example:

Virtually every economics Ph.D. who has worked in a prominent role in the Bush Administration acknowledges that the tax cuts enacted during the past six years have not paid for themselves--and were never intended to.

She then goes on the quote economist Greg Mankiw, saying he wrote that the Bush tax cuts didn't raise revenues, in effect debunking the claim. But what Mankiw wrote was that they didn't raise revenues as much as had been expected, but they still rose. There was also a lag between when taxes were cut and the economy reflected the boost in available capital. It also depended upon which taxes were cut and by how much. That's not quite the same thing.

On the other hand, another commenter appeared to have a better understanding of the effects of the tax cuts on the average taxpayer and even provides some numbers generated using “some great tax preparation software” to debunk claims by others that the tax cuts actually placed a greater tax burden on them.

In the end what it all boils down to is that the only way to reduce deficits in a manner that won't take decades or generations to accomplish is for the government to spend a lot less money, not tax the bejeezus out of everyone that has an income. Or to put it more simply, again: It's the spending, Stupid!”

7/11/2010

It looks like the hot and humid weather has departed the Lakes Region of New Hampshire for the time being. The air conditioning at The Manse was shut off and the windows opened for the first time since July 3rd It will still be warm over the next week or so but the humidity has departed for the time being.

BeezleBub will certainly be grateful for the change in the weather as it won't be as oppressive while he's working in the fields at the farm.

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One plus of the really hot weather we've had over the past week: the lake temperature is up to 77ºF, something we rarely see. It usually tops out around 72 or 73. Not that I'm complaining because 77 is still cool as compared to air temperature. This might also mean we can expect a somewhat longer swimming season.

The latest I've ever taken a dip in the big lake was October 16th, when the water temperature was 61ºF. Somehow I think we might be able to go a little later than that this year. Only time will tell.

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It doesn't help things in general when Obama is still practicing the politics of fear, an attempt to paint a picture that the party presently out of power as the ones that will drag the economy over the abyss. Never mind that the party in power is already doing that at a rate that defies belief.

To use an old phrase, “Isn't that the pot calling the kettle black?”

(If you think the above is a racist phrase, then I suggest you up the dosage of whatever psycho-pharmaceuticals you're presently taking because they aren't working.)

As far as I'm concerned, Obama has become irrelevent (sic). I don't pay any attention to anything he says or does. Nothing the man does of says makes any logical sense. NASA's new mission is to "reach out to Muslims?" Sue the state of Arizona for upholding US immigration laws that are on the books? Sticking his head in the sand and hoping the oil leak goes away? As far as I'm concerned we have no one in charge.

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The unemployment numbers only reflect how many people out of work that are still seeking new employment (and collecting unemployment benefits), but not those who have given up looking because there's nothing out there for them, even at minimum wage. If they are taken into account the unemployment number isn't 9.5% but closer to twice that.

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The last time I looked, Boston was in Massachusetts, not Arizona. So how is it the City Council can decide that Arizona and its governor must be punished for passing a law that has the support not just of Arizonans, but a wide majority of Americans? Despite what President Obama and Attorney General Holder may believe, Arizona's law is very likely constitutional, something they'll be finding out in court very soon.

Even though unemployment hovers just under 10%, there are manufacturing jobs in the US going unfilled. It isn't that no one is applying for those jobs. On the contrary, a lot of people have been applying for them. Unfortunately it appears that far too many of them aren't qualified to fill those empty positions.

According to the most recent statistics, there are 14.6 million Americans looking for work. Surely a handful of these people would be suitable for a manufacturing job? Turns out many of the unemployed are unqualified for the skilled jobs these companies need filled.

But this is exactly what we wanted, isn’t it? American manufacturing has moved, on many levels, beyond the low-skill manual labor of centuries past, and companies are increasing their usage of highly-technical practices like automation and CNC machining.

But all may not be as it seems at first glance. While younger workers may have the education, older workers have the experience that can outweigh education.

...in many cases, the 40-something who has been working in manufacturing job for the last 20 years (yet does not immediately qualify for a high-skill position) might actually make for a better candidate than a 23-year-old who just walked off the stage with their engineering diploma in hand. Think about the malleability of someone who has worked on the shop floor for years; they understand tools, safety, how to work hard, and so on.

But one must also look at the downside of some of these same workers. In certain industries they were crippled by being stuck in one particular job performing the same function over and over again, meaning that outside of that production line environment they've had little or no increase in knowledge or ability. What exactly am I talking about? Unions.

...the anti-competitive spirit of private- and public-sector unions conspires to dumb down its victims, making them into dependents — first of the union and then of the state, when the employer lets them go, or goes under. Even workers in non-union jobs and plants have felt the impact of career compartmentalization as unions have bullied employers to transform the logistics of the factory to suit their members’ alleged need for “security.”

In short, big union collectivism administers Novocaine to the brain, from the kindergarten classroom to the factory floor, thus slowing the economy.

So as the number of private-sector jobs that Americans can’t do swells, only one option remains for the people who have been doped and duped by collectivism: you can cash checks from the government — either for doing nothing at home, or for actively hampering economic growth by working for the government.

Speaking as a former member of a labor union (the International Brotherhood of Electrical Workers), I can attest to the institutionalized sloth a union can bring upon manufacturers. I saw it on the floor every day. I heard it from the union stewards and fellow members of the rank-and-file. It was always “What are you trying to do, kill the job?” if you were working hard to be productive. In other words, you were some kind of a scumbag if you worked hard and gave anything above 50% effort during your shift. Under circumstances like that is it any wonder a lot of manufacturing jobs either headed to other states or other countries?

I think the only reason the company I worked for at the time survived was because it was a defense contractor. The economics were different. If the union had also made its way into the commercial side of the company (much of which was located in other states with right-to-work laws) it would have gone under because it wouldn't have been able to compete on price.

How many times have we seen companies close their doors forever or move their operations elsewhere because they couldn't meet union pay and benefit demands that would have left them less competitive, or worse, bankrupted them?

7/08/2010

I know I'm starting to sound like a broken record in regards to ObamaCare, but it appears our not-so-wise Congresscritters still don't understand the concept of It Ain't Gonna Work.

Again, the health insurance system upon which ObamaCare was heavily based is coming apart at the seams, with costs rising, courts overturning arbitrarily imposed rate caps, and actual access to health care declining.

But the Democrats in Congress and the White House insist everything will work just fine once the program goes national. Never mind that it's no better than what we're seeing the Commonwealth of Massachusetts, just a heck of a lot more expensive and destructive. I guess they think that if they just believe it as hard as they can it will all come true. Too bad that history is against them.

There isn't a single member of Congress capable of pointing out a socialist health care system that works well and provides the level of care available here in the US. Why? Because it doesn't exist and never has.

Every such system eventually fails, either spectacularly or one slow painful step at a time. While a lot of people tout the British, Canadian, and French health care systems as superior to ours, they are wrong. Oh, they'll give us anecdotal evidence that out system really sucks, quoting long discredited WHO studies about things like infant mortality or life spans. But when it comes down to it, after taking a look at thinks like cancer survival rates, survival rates for strokes, heart attacks, actual infant mortality rates (taking into account that the US has a far higher survival rate for preemies, something the WHO stats ignore), the effectiveness of rehabilitative therapy, and a host of other branches of medicine, the US comes out on top. That's why so many people come from all over the world to be treated here rather than going to the UK, France, or Canada. Once ObamaCare kicks in and does great damage to our health care system, that will all change because the US will no longer have such a great health care system.

I must change course on this a little bit to cover something that has become a big pet peeve of mine in regards to ObamaCare.

One thing that drives me to distraction is the mistaken belief that ObamaCare will somehow provide access to medical care. It won't. It isn't designed to do that, despite what many may claim. What it's supposed to do is provide health insurance to those presently without it. It doesn't guarantee access to health care at all. Even today people with health insurance may have limited or no access to routine health care because they can't find a doctor who is willing to take on new patients. (In many cases it's not that doctors don't want to take on more patients, it's that they can barely handle the ones they already have.) Others won't take Medicare or Medicaid patients because of the extra requirements the government imposes on them in regards to staffing and reporting and the poor reimbursements. And yet others in certain specialties won't take on high-risk patients because of the fear of malpractice suits.

Does our health care system have problems? Absolutely. Does it make any sense to pass poorly thought out and damaging legislation that will only make the existing problems worse? Of course not. But that's what we ended up with, courtesy of Obama, Pelosi, and Reid.

7/07/2010

It looks like it's a video night tonight, with this great piece by comedian Louis CK on Conan.

What makes it so good is its truth, that being that people today are too darned spoiled. They take today's technology for granted, either forgetting or being too young to have ever experienced what it was like before cell phones, ATMs, the Internet, and cheap airline fares.

I know I'm dating myself here, but I remember doing all the things he talks about in regards to how everyone used to do things. Of them all, dialing the phone was probably the most annoying. And back then we did actually dial the number, not like now where all we have to do is punch some buttons or, if your phone is fancy enough, merely say “Call Mom” and the phone automatically calls your mom.

7/06/2010

I'd say it gets right to the base of what our present President has managed to accomplish, all while spending over a trillion dollars more than the government took in for revenue, such spending supposedly needed to stimulate job growth. Call it a major failure on his part.

It looks like Obama is trying hard to outdo two previous presidents in regards to their failures, those two being FDR and Jimmy Carter.

FDR managed to find a way to extend the Great Depression for years, his various economic interventions doing far more harm than good. A couple were even outright unconstitutional.

Jimmy Carter managed to take a moderate recession and turn it into a major recession all while making American foreign policy look like a joke. His one foreign policy success has managed to outlive the other two parties involved, Anwar Sadat of Egypt and Menachim Begin of Israel, with his Camp David Accords bringing peace between those two nations that has lasted 33 years.

So far President Obama is looking to blow right past both of them on his way to being the worst president in modern history in regards to socio-economic and foreign policy issues. One example of the former: ObamaCare.

The unintended consequences of this major intervention into the health insurance/medical care industry are already being felt even though the major parts of ObamaCare don't go into effect until 2014. Two of the biggest side effects of this ill advised and poorly written law? The loss of experienced medical personnel from the health care ranks and businesses doing away with health insurance for their employees because ObamaCare will make it too damn expensive for them to continue providing it.

Under the many restrictions being laid upon health care providers by ObamaCare, doctors and nurses are seeing no future in remaining in their chosen professions and will be leaving them over the next few years. How is that supposed to translate into better healthcare for all? The answer: It doesn't.

With the new requirements for providing employee health insurance laid upon businesses, many of them, primarily smaller businesses, see no economic sense in continuing to do so. Again, ObamaCare provides big disincentives for those businesses. How does this help anyone? Again, the answer: It doesn't.

In the end, both of these unintended consequence will have a negative effect on the economy, and in turn, on jobs.

Even with some businesses now hiring again, the question that must be asked is What kind of jobs need to be filled? It certainly isn't going to be the kind that were lost over the past 3 years. Instead, the jobs needing to be filled will be lower paying jobs.

The good news for people out of work is that overall job vacancies are up 21 percent over the past six months, based on a separate Labor Dept. report. The bad news is that there are still five unemployed people for each job opening. That’s down from a peak of 6.2 at the end of last year, but at the beginning of the recession in December 2007, there were only 1.8 people competing for each vacancy. That means, for many months to come, a lot of talented people will be going head-to-head for new positions, a lot of which are still concentrated in lower-wage industries.

Where are the good jobs Obama promised? They certainly aren't out there in the real world. Of course they might have been if he hadn't done everything in his power to extend the length and depth of the recession by providing all kinds of incentives for businesses to hold off expanding and for people to remain on unemployment.

With the hundreds of billions of dollars slated for 'stimulus' spending, very little of it went for things that would have actually helped during and after our country's economic recovery. Every dime of that money should have gone into infrastructure for things like the thousands of bridges, roads, and highways that need upgrades or replacement, water and sewer system upgrades and expansion, port facilities, airports, electric power distribution systems, and telecommunications systems upgrades (particularly for rural areas of the nation). Instead, most of what was spent went to creating more government jobs, jobs which produce nothing in the way of goods or services like private industry. The government jobs also produce little in the way of actual revenue for government, unlike private sector jobs.

Tax increases also place a greater burden on the economy, reducing the amount of discretionary spending by wage earners. Obama hasn't grasped the fact that every time the government takes more from the taxpayers they have less to spend on the goods and services that drive the economy. By allowing the Bush tax cuts to expire at the end of this year, Obama will not see a great increase in revenue next year. Instead he'll see revenues fall, as will the GDP. The fall in revenue will have a number of causes, one of the biggest being individuals and corporations shifting income, dividends, or capital gains payouts forward to this year in order to avoid paying the higher taxes next year.

The increase in tax rates will cause businesses and individuals to change how they do business in an effort to minimize their tax burdens, something quite normal for them to do. For some individuals that means foregoing pay increases or bonuses that push them into the next higher tax bracket. This is because if they pay at the higher tax rate they'll end up with less money than before their raise. In effect, the pay raise punishes them for doing well because of the higher tax burden it brings.

The return of the estate tax - the so-called “death tax” - at the end of the year will also collect very little in revenue as the smarter folks will find ways of transferring their estates before their deaths, avoiding paying 55% of its worth to the federal government. Of those failing to do so, the 55% estate tax may end up costing jobs as some family owned businesses will have to be liquidated in order to pay the taxes. Somehow I doubt that was the original intent of the estate taxes. But because the “soak the rich” mentality permeates Congress and appears to be Obama's economic raison d'être, it will come back with a vengeance and will end up hurting far too many American business owners, their families, and their employees. More jobs will be lost because of it. (If you don't believe that, all one needs to do is look at the effects of the now defunct “luxury” tax on cars, boats and planes. Sales fell off to almost nothing and thousands lost their jobs. The amount of revenue collected by that tax was minimal, but the government paid out millions in unemployment benefits. While not a perfect illustration of the unintended effects of a poorly thought out tax policy, it does get the point across that the government is vastly overestimating the potential revenues to be gained while ignoring the side effects. No surprise there.)

I could go on and on with a list of things Obama has done or wants to do that will have the effect of killing jobs here in the US, but I have better things to do. I also have to include Congress in this as well as we've seen the Democrats in the House and the Senate working towards the same outcome with poorly written, unreadable legislation that does nothing more than burden taxpayers and businesses with increasing levels of regulations that will, in the end, help no one and kill jobs.

7/04/2010

This is an abbreviated Thoughts On A Sunday as we have a number of things planned for this Independence Day celebration.

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BeezleBub and I headed out on The Boat yesterday evening and made our way down to Alton Bay for their 4th of July fireworks show. On board we also had three of BeezleBub's co-workers from the farm: Rafael from Brazil, Yulia from Ukraine, and Irina from Russia.

While Rafael has been with us out on the lake before, it was the first time for Yulia and Irina. It was quite apparent they had a great time. While fireworks weren't foreign to them, it was the first time any of them had experienced viewing them from a boat.

The trip back from the bay took longer that the trip there because it was dark and there was a lot of wave action generated by a couple of hundred boats making their way up a narrow bay after the show was over. Once we were back on the main part of the lake we were able to pick up the pace a bit, but still had to be mindful of the wakes from boats ahead of us.

All in all, it was a great time.

BeezleBub made the suggestion that we go out again tonight for the fireworks in Meredith Harbor, but I'm not sure I'm up to dealing with the wakes from a couple of hundred boats. In the dark. Again.

It's tough enough during daylight hours. Once a year is enough for me.

It looks like Obama's master plan for economic recovery have met up with reality and have been found wanting. Of course he could do something radical (for him), like get government out of the way (and out of people's pockets) and let the economy fix itself.

Yeah, like that will happen.

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Oh, there's something I forgot to mention earlier this week.

BeezleBub got his driver's license this past Wednesday.

I admit, yet again, that I am of two minds about this. I'm glad that he now has the means to get himself from place to place without our help. I'm also sad that he now has the means to get himself from place to place. I guess he doesn't need his old man as much as he did only a week ago.

On the other hand, he is still incapable of getting up when his alarm clock goes off, leaving it to me to drag him out of bed to get ready for work at 5:50 in the morning.

Somehow I think it's just an excuse on his part, not wanting let go entirely of what his dear old dad can do for him. I just wish it wasn't quite so early in the morning, specifically on my days off!

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I've noticed it as well, seeing local gas prices hanging around $2.58 per gallon, down almost 20¢ since the end of April. We usually see prices start rising around Memorial day as the summer travel/vacation period starts. But this year it's been just the opposite. Marine gas prices on the lake are also lower than I would have expected them to be.

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And now I'm off. There are burger patties to make, a grill to fire up, and cold drinkables to consume.

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And that's the news from Lake Winnipesaukee, where fireworks will be booming tonight, barbecue grills are running, and where Old Glory waves in the breeze.

It is with increasing dismay I watch our President try to drive us down the path to economic ruin.

While some make the case that he's doing it deliberately, with malice and forethought, others ascribe his attempts to 'fix' America's economic problems to willful ignorance, a psychological incapability to believe he can be wrong, or outright stupidity.

Personally, I think it's a combination of all of those things, with the psychological aspect being the leading factor.

There's no doubt in many American's minds that Barack Obama is a classic narcissist, believing he's the only one with the knowledge to fix America's problems. It doesn't help matters that he seems to require unquestioned adulation. Anyone disagreeing with him on any point is seen as being unworthy, wrong, or some kind of close-minded ideologue, something our thin-skinned President has made abundantly clear on more than on occasion.

When his plans don't come together as he wishes, it's always someone else's fault, either through their sheer incompetence or their less than total commitment to his ideas. It's never because his plan was faulty. Never mind that many of his new ideas are merely rehashes of old ideas already found to be unworkable, or worse, cause far more misery than doing nothing. It's like the old mantra of “Yeah, but this time we'll do it right!” running through his head. It won't matter because the old ideas still won't work.

While saying he is willing to “reach across the aisle” in a show of bipartisanship, far too often he's done just the opposite. It has become clear to me his definition of bipartisanship is indeed “All you Republicans sit down, shut up, and do what I tell you to do!” Many of his followers believe he can work in a bipartisan fashion, but looking of his history in Illinois and the US Senate show he's never done so. So how is it that they believe he'll do it now?

His attempts at foreign policy fill me with dread, seeing how his “smart diplomacy” has been neither smart nor diplomatic. How is it he thinks that by insulting our allies and cozying up to our enemies that he'll be able to bring about a kinder, gentler America loved by all? He's on a fool's errand. There will never be a point where everyone loves America. All he's doing is generating contempt for him, and by extension, for the US.

It appears he also believes that by sheer force of his personality that he persuade foreign heads of state to accept his vision of what needs to be done. If nothing else, the G8/G20 summit in Toronto put the lie to that, with many of them telling him “Sod off!”, so to speak, after he tried to persuade them that his vision of how to fix the economic problems everyone is dealing with is the only one worth considering. Ireland has shown that he's wrong by taking austerity measures and pulling themselves out of their recession without the need for more stimulus spending.

He doesn't seem to understand that even Keynes believed any deficit spending for economic stimulation should be of short duration or it could end up causing greater economic hardship than if thee were no stimulus spending at all. It appears Obama's working to make sure the stimulus is a more permanent thing, mostly by making sure most of the jobs created by such spending are government jobs rather than private sector jobs. He doesn't understand that those government jobs do little more than suck money out of the economy and give little in return. How is that supposed to stimulate anything?

OK, I think I've said enough for now. It's time for me to back away from the keyboard and go to bed.

7/01/2010

There's no doubt in my mind we're seeing a second dip in the housing market, considering the $8000 tax credit ended in April. Mortgage activity has all but ceased (but refinance activity has picked up a bit). There are other signs the housing market is softening further, and that we aren't anywhere near the bottom.

We've been in the process of trying to refinance our mortgage, seeing the interest rates are quite favorable. We're planning on a shorter term at a rate a little over 1 point lower than our present mortgage, meaning our monthly payment will be the same, but the mortgage will mature in a third of the time. Others are refinancing in order to reduce their monthly payments. Anyone capable of doing so would be crazy not to. But that doesn't help the housing market in any fashion.

One of my biggest worries about declining housing values is that what equity we do have in our home will dwindle further, if not disappear. While this may seem like an unlikely scenario, it isn't impossible. In fact, it's highly probably.

In the real world, the U.S. housing market has fallen less than half the distance it needed to fall to bring U.S. housing prices back to sane levels. While defining "sanity" is an ever more difficult task in this age of disinformation, let's start by going back to the mid-1990s. It was in the second half of that decade U.S. housing prices began a much steeper incline than previous years, and (depending on whose numbers you look at) U.S. home prices roughly tripled over that span.

I know housing prices in the Northeast have been too high for decades, going back to the first housing bubble during the late 1980's. Prices were going up at a rate many times that of inflation. It didn't help that a group of speculators were helping to drive up housing costs by churning properties (buying from a homeowner then reselling to other speculators to drive up the price) and then dumping them on unsuspecting buyers. It didn't help that a small number of banks were helping the speculators. When the bubble burst right during the 1990 recession, a lot of people found themselves upside down on their mortgages. What made it even worse was that many homeowners lost their jobs, meaning they had no way to make their mortgage payments. A lot of them ended up abandoning their homes, in effect handing the keys over to the bank and telling them “Good luck!”

Even though prices fell then, they didn't fall to a level that would have reflected the actual value would have been without the bubble.

With this second round of the housing market collapse, is it possible the decades overdue correction is about to take place?

Should U.S. homes fall back to 1970 prices (while U.S. workers earn their 1930's wages), that implies that U.S. home prices will fall more than 75% from today's prices.

Could home prices could fall that much? I don't know. I'm not sure that the quote above is based on actual 1970's prices or inflation adjusted prices. Either way it doesn't bode well for present homeowners.

Should that happen almost anyone with a mortgage would find themselves upside down on their note, which in turn could lead to an even greater round of defaults and walkaways. Those capable of doing so could first buy a house at the greatly reduced price and then let their first home go into foreclosure. (It's being done today in places where real estate values have fallen so much that many homeowners have found their homes to be virtually worthless.) Of course I'm assuming the Frank-Dodd Finance Reform bill doesn't make it through Congress, because if it does pass it's highly unlikely anyone will be able to get mortgages unless they don't need them. And that will only make things even worse in the housing market.